Progressive and Darden Restaurants Show Resilience in Challenging Market

Strategic Insights -

Progressive Corp., a leading auto insurer, has reported impressive earnings for August, benefiting from a 4% year-over-year increase in net premiums written and avoiding investment losses. However, the company's Commercial Auto segment continues to struggle, with policies in force down 5% in August. Meanwhile, Darden Restaurants Inc. has found a secure footing in the casual dining segment, with a revised "Stable" outlook from Fitch and significant cash flow generation despite a challenging economic environment.

Key Takeaways:

  • Progressive Corp.'s earnings for August were impressive, with a profit of $55 million, or 8 cents per share, compared to a loss of $135.2 million, or 20 cents, a year ago.
  • The company's net premiums written rose 4% year over year to $1.1 billion, while its combined ratio deteriorated slightly to 95.5% from 94.3% in the last year.
  • Progressive's Commercial Auto and Agency Auto businesses were down 5% and 1%, respectively, in August, but Direct Auto and Special Lines were up 12% and 3%, respectively.
  • Darden Restaurants Inc. has maintained a strong competitive edge and generated significant cash flow, with a revised "Stable" outlook from Fitch and a 2.2% increase in cash flow from operations to $783.5 million.
  • The company's same-store sales fell 1.4% in fiscal 2009, but its cash flow from operations and free cash flow remained strong.

Statistics:

  • Progressive Corp.'s August profit was $55 million, or 8 cents per share, compared to a loss of $135.2 million, or 20 cents, a year ago.
  • The company's net premiums written rose 4% year over year to $1.1 billion in August.
  • Progressive's combined ratio deteriorated slightly to 95.5% from 94.3% in the last year.
  • Darden Restaurants Inc.'s cash flow from operations increased 2.2% to $783.5 million in fiscal 2009.
  • The company's free cash flow totaled $138 million at the end of fiscal 2009.

Sources:

  • Zacks.com, "Progressive Impressive in August" (no date provided)
  • Fitch, "Revised Rating of Darden Restaurants Inc." (no date provided)
  • Zacks Equity Research, "Darden Finds Secure Footing" (no date provided)
  • Zacks Investment Research, "About Zacks Equity Research" (no date provided)
  • Zacks.com, "About Zacks" (no date provided)